Bryan Lust, site manager for Kimberly-Clark, walks across the 67-acre former site of the company’s Everett mill in March 2017. (Ian Terry / Herald file)

Bryan Lust, site manager for Kimberly-Clark, walks across the 67-acre former site of the company’s Everett mill in March 2017. (Ian Terry / Herald file)

Port hopes to close deal for Kimberly-Clark site, has plans

Generations worked at the Everett mill until its closure in 2012, which left behind empty, polluted land.

EVERETT — An empty expanse of gravel yawns on the Everett waterfront, where generations of workers once toiled in a thrumming paper mill.

There are new signs that industry could stir back to life at the former Kimberly-Clark site.

The Port of Everett, and at least one potential rival, are in talks to buy the 66-acre property from the paper products manufacturer. Kimberly-Clark looks to be doing its part to make something happen. The company in November applied for permits to clean up the site, a step toward resolving a legal standoff with the city of Everett.

“We are actively negotiating a purchase and sale agreement for the acquisition of the site,” said Lisa Lefeber, the port’s chief of policy and communications. “We are working on acquiring the property to balance the various interests for the waterfront.”

A competing offer could come from a private partnership that includes a cargo-handling company that already has a long-term lease with Kimberly-Clark for part of the site. Everett Terminals and Storage, a subsidiary of North American Stevedoring, hopes to work with an undisclosed party to build out warehouses, offices and trucking facilities next to a working wharf. The project’s backers expect it to support at least 800 jobs.

“The vision we are pursuing is exactly the kind of economic development needed for this site and needed for the future of Everett,” said Austin Hicks, a public affairs manager who’s representing Everett Terminals.

After years of impasse, 2019 could offer a glimpse of that future.

Everett port commissioners voted unanimously in 2016 to pursue buying the property next to Naval Station Everett.

If a deal goes through, the port sees the mill site as an opportunity to free up land to the south for a shipyard capable of working on military vessels, Lefeber said. A shipyard, in turn, could help entice the U.S. military to homeport ships in Everett.

That’s significant in light of the Navy’s recent decision to move the USS Nimitz aircraft carrier permanently to Bremerton, where it has been undergoing repairs since early 2015, instead of returning it to Everett. Political leaders have been trying to convince the Coast Guard to station cutters here.

Vigor Marine formerly leased the shipyard property south of the former mill, but the port in 2017 allowed the company to end its lease.

“This is the longest period in over 100 years that we haven’t had a shipyard on our waterfront,” Lefeber said. “We are trying to support a shipyard that has military qualifications and capabilities so they would be able to help the maintenance needs of the (Navy) destroyers or any Coast Guard assets.”

Part of the shipyard is now used for the port’s Foreign Trade Zone, a secure area established under a national program to reduce customs duties and other fees on overseas goods. The Foreign Trade Zone could move to the mill property if a sale goes through.

Dallas-based Kimberly-Clark closed the paper and pulp mill for good in 2012, after failing to interest any buyers. More than 700 workers lost jobs.

This aerial view from 2015 shows the former Kimberly-Clark mill site on the Everett waterfront. Naval Station Everett lies to the north and west, the Port of Everett’s shipyard to the south. (Snohomish County)

This aerial view from 2015 shows the former Kimberly-Clark mill site on the Everett waterfront. Naval Station Everett lies to the north and west, the Port of Everett’s shipyard to the south. (Snohomish County)

Demolition crews came, leaving the area mostly leveled, except for a warehouse. The mill had operated there since 1931.

City leaders soon grew concerned about the site’s condition. Everett sued Kimberly-Clark in 2014, alleging that the company failed to meet cleanup obligations. The city expected Kimberly-Clark to cover demolition debris with clean topsoil. Instead, the debris was left exposed.

The Department of Ecology has detected arsenic, lead and other toxins there in soil and groundwater.

Everett’s lawsuit remains active in Snohomish County Superior Court, though there’s been no action since 2016.

“The city has had a positive working relationship with Kimberly-Clark during the past year, and we’re pleased that the company is taking steps to move forward with a comprehensive cleanup of the site,” the city said in response to The Daily Herald’s questions.

After the mill closed, the Everett City Council zoned the area for water-dependent industrial development, hoping for a blue-collar future. Mayor Cassie Franklin recognizes the site’s economic potential to restore jobs on the waterfront, according to the city statement.

Kimberly-Clark applied for city permits in November to start additional cleanup. The proposal entails removing crushed concrete, brick and masonry that covers about 32 acres at depths of 1 to 5 feet. The city had no estimate for how long a permitting decision will take.

To carry out the work, the company needs other approvals from the state Department of Ecology and the Snohomish Health District. The project will likely need a state permit for storm runoff from a construction site, said Larry Altose, a Department of Ecology spokesman. The state also expects to amend its cleanup agreement with Kimberly-Clark, including a public comment period early next year.

A Kimberly-Clark spokesman confirmed the company is working toward “a timely and effective remediation of the site.”

“Our long-standing focus remains on helping the next generation of jobs to return,” Terry Balluck said. “… at this time K-C is not able to comment on any ongoing negotiations with any potential buyers.”

The company’s asking price has been $38 million.

The port isn’t the only potential suitor.

A sale to Saltchuk, the parent company of Seattle-based tug and barge operator Foss Maritime, had appeared to be a sure thing. The deal fell apart in 2014 over environmental conditions and how the land would hold up in an earthquake.

Kimberly-Clark signed a long-term lease in 2017. North American Stevedoring, a cargo-handling company, hoped to use about a third of the site for a warehouse operation that would employ 100 people. It would be run by a subsidiary, Everett Terminal and Cold Storage.

Everett Terminal applied in early 2018 to build a 200,000-square-foot cold-storage warehouse, with the aim of starting construction during the second half of 2018. That hasn’t happened. City planners requested more information about the plans, but had not received it as of early December, said Meghan Pembroke, an executive director in the mayor’s office.

That warehouse is one part of a broader vision to create a maritime hub, said Hicks, the public affairs specialist working with the company. Plans show the cold-storage facility in the middle of the property, with a new wharf to the west, smaller warehouses and offices to the north, and a truck court to the south. At least one other corporate headquarters would move there alongside North American Stevedoring.

The existing lease is for 20 acres. It includes an option to purchase that must be honored by any other buyer, he said.

The port is aware of the lease, Lefeber said.

If the mill property were to come under port ownership, it would no longer generate property tax. Any businesses, however, would pay a leasehold excise tax of 12.84 percent.

Noah Haglund: 425-339-3465; nhaglund@herald Twitter: @NWhaglund.

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